- The latest employment data from the Bureau of Labor Statistics shows wages grew again in January.
- Wages have grown 5.7% year-over-year, showing how much firms are hiking pay to attract workers.
In January, Americans got paid even more.
That's according to the latest employment data from the Bureau of Labor Statistics. Average hourly earnings for all workers soared to $31.63 last month — a 5.7% jump from a year ago. Production and nonsupervisory workers were earning an average of $26.92 an hour, up 6.9% from January 2021.
Workers aren't just making more money. They are looking for — and getting — more jobs, according to BLS data. That's after months of quitting in record numbers, showing people aren't leaving the workforce completely but rather participating in a "Great Reshuffle" in search of better a better deal. Across industries, pay is one major way companies are enticing those job switchers to come back to work.
The following chart highlights just what
More money, more jobs
The BLS data also shows a surprisingly large number of jobs were added in January. The US added 467,000 nonfarm payrolls in January, and revisions to prior months' data shows that there were 709,000 more jobs added in November and December than originally reported. And the unemployment rate ticked up to 4%, which is actually good news; it means more people are stepping in from the sidelines to look for a job.
Daniel Zhao, a senior economist at Glassdoor, said one important asterisk is that it's possible lower-wage workers were more impacted by Omicron — potentially pushing up earnings seen in January.
Nonsupervisory workers in leisure and hospitality actually saw their hourly earnings dip in January from the prior month. Zhao said that "this month is a little bit unusual because of Omicron and the impact that it is likely having on frontline workers." While leisure and hospitality is still adding jobs at a rapid clip, the industry is 10% below February 2020 levels of staffing.
"These job numbers further emphasize that the only way the industry will be able to have enough staff to fully re-open is if state and local governments raise the minimum
But, even so, workers across almost every major industry saw gains from December to January.
"At the same time, the overarching story again is that wage growth is still strong as a result of the competition that employers are facing for workers," Zhao said.
The following chart looks at wage growth from December to January by industry:
Minimum wage workers saw a big jump, according to Dr. William Spriggs, the chief economist of the AFL-CIO and economics professor at Howard University.
Part of the wage growth is from workers switching roles as part of the Great Resignation, Spriggs said, "but the minimum wage is exceedingly important."
"Over half the American workforce lives in a state where the minimum wage is on its way to $15 an hour. In most of those states, the minimum wages automatically index to inflation," Spriggs said. "So those workers have seen 13% wage growth because they're on their way to 15."
It's another factor contributing to the staggering wage growth over the past year, which runs counter to the previous five decades of declining wages. The past year has seen wages rise, and workers flex their (still limited) power more through the
"Wage growth, especially for some of these traditionally lower wage sectors, like leisure and hospitality, is a positive sign for workers that they're entering 2022 with more leverage," Zhao said.
Nick Bunker, economic research director at Indeed Hiring Lab, told Insider that nominal wage growth has been strong and that job seekers have been taking jobs in part because of the robust growth.
Beyond wages, Bunker said time — both how long people work and how flexible it is — is another way companies can attract workers.
For instance, in retail, "the stability or the ability to know what your schedule is in advance might be something that employers could think about and potentially change, and that could make those jobs more appealing to folks," Bunker said.